Cost of goods manufactured is

Question

Quizplus · Accepted Answer

Cost of goods manufactured includes all costs incurred in the production process, including direct materials, direct labor, and manufacturing overhead. It is recorded as a debit to the Finished Goods Inventory account because it represents the cost of the goods that have been completed and are ready for sale. The cost of goods sold, on the other hand, represents the cost of the goods that have been sold to customers and is recorded as an expense. Options A and B are incorrect because the cost of goods manufactured is not necessarily the same as the total direct costs, and it is not recorded as a debit to the Cash or Accounts Receivable account. Option D is incorrect because cost of goods manufactured and cost of goods sold are two separate items.

Cost of Goods Manufactured Is